Why Modernize Applications? The Reasons Might Surprise You
April 3, 2023 Alex Woodie
A wave of interest in application modernization seems to be cresting over IBM i and mainframe shops in the United States and Europe, and it’s having some unanticipated impacts. We’re also getting a better understanding of what’s motivating companies to jump into these potentially risky projects, which is a topic that EvolveWare touched on in its latest report.
EvolveWare, which develops modernization tools for mainframe and IBM i applications, discussed several aspects of modernization in its report on modernization released last month. Our first take on the report, which is titled The State of Application Modernization 2023, focused on an apparent disconnect between the confidence that organizations feel before and after they start the projects. To recap, many organizations go into these projects feeling very comfortable in terms of their knowledge of how their applications work. As they begin the project, that confidence takes a precipitous drop.
But there were some other interesting findings that came out of the report, which is based on a survey of 200 IT leaders at large American firms running IBM i and System z gear in financial services, insurance, and healthcare. One of those is the primary motivation for embarking upon these modernization projects in the first place. In other words, the “why.”
It turns out there are a slew of reasons why companies might want to either refresh their aging RPG and COBOL applications, or move them entirely off big iron platforms to open systems like Windows Server or Linux running on Intel or AMD X86 platforms or “the cloud.” That shouldn’t be surprising, considering the wide range of companies and the different goals, cultures, and people that they’re made of. Aside from the big iron platforms they run software on, this is not a homogenous bunch.
The number one stated reason for embarking upon a modernization project, according to the survey, is to boost employee productivity, which was chosen by 40 percent of survey-takers. That was followed by a desire to retire mainframe infrastructure at 37 percent and reducing dependency on legacy code at 36 percent (see nearby graphic).
When it comes to reasons for beginning a modernization project, there are two broad categories that the reasons can be grouped in, according to EvolveWare’s report: external and internal.
External reasons for modernization are usually aligned with larger business goals, such as increasing revenues and profits, lowering costs, increasing customer satisfaction, and increasing competitiveness. These external factors are usually driven by the business side of the house as opposed to the IT team.
Graphic courtesy EvolveWare
Internal reasons for application modernization are usually driven by the IT department and are more focused on operational efficiency. Motivations that land in the internal camp include a desire to retire the mainframe or midrange hardware, to reduce dependency on legacy code, to move to the cloud, to eliminate (or at least reduce) security vulnerability, and deal with staff shortages.
EvolveWare chief executive officer Miten Marfatia was surprised at some of the reasons that survey respondents gave for initiating modernization projects.
“If you look at what’s driving modernization, the IT teams are saying that I need to modernize because I’m having trouble managing these systems on a day-to-day basis, versus what’s driving modernization at the management level, it is saying that I will modernize if I can generate increased revenue or I can increase efficiency,” Marfatia says.
“Two different things altogether,” he tells IT Jungle. “Because if you think about it, modernizing may not result in immediate revenue increases. It will take a little bit of time. And you have to go through the modernization process, to which they will say, ‘Hey, what’s my cost?’ They’re not looking at what the IT teams are looking at, which is I need to modernize because I have problems managing my applications.”
There’s a giant red flag waving here, but the business folks are not paying attention. They should be listening more carefully to what the IT folks are saying, but they’re not, Marfatia says. “The number one driver should be that support personnel are retiring but just not available,” he says.
The lack of trained IT personnel is a factor in other issues surrounding modernization. As discussed in our first story on EvolveWare’s study, a big reason that companies are overconfident going into their modernization projects is because they assume that their programmers know how the programs work. (This concern would be alleviated if the company had documentation, but practically nobody has that.)
Once they start their projects and discover that their IT team doesn’t have as firm a grasp on the business logic as they assumed – or that there are giant holes in the IT staff itself and they’re just trying to keep their heads above water – then their confidence drops down to where it probably should have been in the first place.
While the IBM i and System z applications may be perfectly fine, the lack of skilled IT personnel is making it risky for businesses to continue to run them. This is antithetical to the typical reason cited for modernization, which is that the systems themselves have grown too old and lack the functionality that can be found in newer systems.
“I don’t think mainframe is the problem. The problem is not that they don’t perform,” Marfatia says. “Yes, of course it’s more expensive than a distributed platform and software running on a distributed platform. But for large companies, I don’t think that’s the problem. The real issue is what do you do if you cannot manage or maintain those applications?”
Unfortunately, the prospects for improvement in the personnel department are dim when it comes to platforms like System z and IBM i. IBM itself spent $4 billion to bolster education in its technologies in universities around the world, Marfatia says, and has little to show for it.
“They spent a ton of money on this and they’ve tried to educate. But how do you change the mindset of the young computer programmer who says, hey, I want to know the latest and greatest? That’s all I’m interested in,” he says. “You know how it is. If someone says ‘I have a job for you as a support person and a job for you as a brand new programmer,’ you know where people are going.”
It’s never too late to see the world for what it truly is, and so this exercise in gaining greater clarity around the real risks involved in modernization should be a positive one for businesses. But sometimes, management doesn’t learn the lessons until it’s too late.
For example, take the Southwest Airlines incident from late 2022, which has been much-discussed within EvolveWare. An outdated crew scheduling system has been fingered as the culprit in the implosion of Southwest’s operations, which led to the cancelation of 17,000 flights over the Christmas holiday and an estimated $825 million hit to the airline’s bottom line. If only Southwest’s management had listened to the IT folks, Marfatia says.
“The IT teams were telling them for 10 months that you need to look at this problem. But it wasn’t, shall I say, the critical factor for the business or the C-suite people, because they were looking at what is it bringing us in terms of profits or revenue,” he says. “Now what they should have looked at is what is the cost of that system failing? If they knew that – that cost was in the hundreds of millions of dollars – then they would have said forget the revenue increase. Think about not losing revenue!”
There’s one more aspect to what’s driving modernization that’s worth touching upon. It’s remarkable that, three or four years ago, moving to the cloud was cited as a primary reason for application modernization. However, migrating to the cloud came in dead last in EvolveWare’s survey. That doesn’t surprise Marfatia.
“It wasn’t much of a surprise because over the last three to four months, what we’ve seen is people complaining about the cloud costs,” he says. “And that’s becoming a source of contention right now, with the cloud service providers.”
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